Reverse Mortgage Payout Options - part 2

by Greg Patti

? Term Payment. This is a monthly check, like tenure payments, only for a fixed period. The most common terms are 10 years, 12 years, or 14 years. The money stops at the end of the term. This is especially good if you have high costs now (such as for travel or home repairs) and you are absolutely certain you will have lower expenses in later years. It is also a good possible option if you have other money set aside for living expenses, since once the term is up, the money is gone.

? Line of Credit. This option is a checking account with all of the reverse mortgage cash. You earn interest on any unused balance. Typically, you are given a checkbook, and can write checks against the line of credit, just as you would an ordinary checking account with your bank. With a HECM loan, you earn interest on the unused portion. With a Home Keeper loan, however, you do not, making this a more viable option when used as part of a HECM reverse mortgage. While this option allows for maximum flexibility, it is not for anyone who is likely to spend all of the money at once. When the money is gone, it is gone.

? Combination. This means just what it sounds like -- any mixture of the above options. For example, you might take a $6,000 lump sum to get the home remodeled, plus take $300 per month for a 10-year term payout; and finally, take a $10,000 line of credit (just in case something comes up).

Fine tuning your reverse mortgage payout is extremely important. As you can see from the above example, the payout type can greatly impact how much money you receive, as well as whether or not it comes in a way that helps you achieve your financial goals. For more information about reverse mortgages, and how to find the right reverse mortgage for you, visit my web site, www.ReverseMortgageBook.com.

Copyright (c) Greg Patti

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